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Why McCutcheon Is Bad News For Millionaires

By JUSTIN LEVITT

April 02, 2014

On Wednesday, the Supreme Court struck down a set of federal campaign finance limits. Some immediately bemoaned the ruling as another step toward plutocracy. But here’s a striking side effect: More than a few high rollers have not yet noticed that they just got bumped outside the velvet rope.

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The final result in McCutcheon v. FEC was not the apocalyptic ruling some anticipated. Leading up to Wednesday’s opinion, there was no shortage of end-of-days soothsaying. Blame the court’s 2010 Citizens United decision, which apparently recalibrated the rhetorical stakes for this type of case.

The court’s actual ruling undershot the hype. It left intact the same legal approach in place since the 1970s. The court used to look very skeptically at limits on independent spending (by organizations like super PACs), and left more regulatory latitude for limits on gifts directly to parties and candidates (and groups that donate directly to parties and candidates). It does still.

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As Chief Justice John Roberts announced right up front, “Notwithstanding the robust debate, we see no need in this case to revisit [our] distinction between contributions and expenditures and the corollary distinction in the applicable standards of review.” Only Justice Clarence Thomas would have upset the applecart entirely, and thrown out all limits on political contributions.

Instead of wholesale doctrinal change, McCutcheon focuses on a relatively narrow issue: aggregate limits on donating to parties and candidates, and to groups that make donations to parties and candidates. Congress limited the total amount one person could give directly: no more than $123,200 every two years. That total was further subdivided: For example, no person could give more than $48,600 in total every two years to all federal candidates, in $5,200 chunks per candidate.

These aggregate limits are what the court struck down Wednesday morning. Even with latitude, limits still need to be justified. The court’s logic was simple: Congress believes that giving $5,200 to each of nine candidates does not impermissibly corrupt those nine candidates. According to the court’s plurality, “If there is no corruption concern in giving nine candidates up to $5,200 each, it is difficult to understand how a tenth candidate can be regarded as corruptible if given $1,801, and all others corruptible if given a dime.”

That is true. And also myopic. Though it is a bit hard to blame the court, when no party pointed to the real problem.

The 10th candidate is not the only source of concern. Party leaders are under pressure to support not just some of their candidates, but all of their candidates. A max donation to nine candidates is a lot less useful than a max donation to all of the party’s incumbents and all of the challengers. Aggregate limits prevented donors from earning special party favors by running the table. No more.

Quid pro quo arrangements are unlawful. But an awful lot happens in Washington with winks and nods. Now, wealthy individuals can quickly jump to the front of the legislative line by checking the “all of the above” box.

That is where most of today’s commentary has focused. But the court’s opinion is not just about the access of the wealthy to Congress. It is also about the access of Congress to the wealthy.

Before today, political powerhouses on the receiving end of a fundraising call could cite aggregate limits as a ceiling and an excuse: Sorry, I’ve already given my $123,200 for this cycle. In 2012, according to the Center for Responsive Politics, approximately 650 individuals maxed out. And in so doing, they preserved their prized place in the pecking order.

Today’s decision raises the cost to keep up with the Joneses. Limits on gifts to individual candidates and parties remain, but not the aggregate totals. Which means that maxing out to a party’s three national committees will run $97,200. Add $1 million for each state’s party committees. Add $2.8 million for each of a party’s candidates for House and Senate. (This assumes just one candidate per race. If the party has an interest in funding multiple primary contenders, tack on whatever you please.) Then add an unlimited number of PACs favoring the party. Tack on the inevitable demands for bundling others’ contributions. And super PAC funding.

Now, after today’s decision, a demonstration of true commitment to the party has no real ceiling at all. “Maxing out” across the board has lost its meaning. Just taking care of the official bearers of the party brand will cost at least $3.9 million, every two years.

Four million bucks is a rather sharp uptick from $123,200. And while most of the attention has focused on the impact of that quantum of money flowing directly to party coffers, it is also worth noting that if maxing out used to be the cost of doing business, the cost of doing business just got a lot more expensive.

Some of the maxed-out donors from the 2012 cycle will have the means and desire to join the new biennial multi-million club. But many will likely balk.

The plutocracy just got smaller.

Justin Levitt, a professor at Loyola Law School, Los Angeles, is an expert on the law of democracy.